Hacker News Reader

Comment by pat2man | Hacker News Reader

My hypothesis: people are either consciously or unconsciously afraid that most jobs will disappear in the near to medium future. This is manifesting itself in many ways (nationalism, etc.). Adults feel it, children feel it. Our leaders are doing their best to make us feel like they have it under control but no one has a good solution, and until we come up with something these problems are just going to get worse and worse.

View on HN

I am not sure it's just about jobs. Wealth in general is evaporating from the lower/middle class rapidly. There was a time when middle-class wages were kept in-line with inflation, this doesn't happen any more.

The wealth is being syphoned away from the economy at large into the coffers of huge corporations/individuals who just warehouse the wealth.

There is very much a sense of resources being scarce and it's due to those resources and wealth being taken out of the economy.

warehouse the wealth? that's not how it works at all!

Not sure if this is a joke or not, but that's actually what's happening right now - many large firms are literally just stowing cash: https://www.marketwatch.com/story/these-are-the-5-us-compani...

I suspect the argument is that when $BIGCORP puts $1t in the bank, the bank gives out $900b as new loans

Ah, I see. Good point.

I think investment is actually a measured variable.

But that's not how money works. Banks don't loan money they have on deposit. They loan money they create from thin air, and are required to have a certain amount of deposits to potentially cover that if their exchanges with another bank become too imbalanced. That's what's called "leverage."

I don't see how what you said conflicts with what isostatic said at all.

Then either corporations can hoard all the money, leaving less for the rest of us, or banks can create money from thin air, in which case there's no practical limit and hoarding doesn't matter.

There is only so much the super rich spend, what's left is either sitting somewhere collecting interest or being exchanged between other super rich and never trickles down again as tax or paychecks.

Money is a zero sum game and the super rich are hoarding it, which widens the social gap.

Money is absolutely not a zero sum game. More is created e.g. by loans all the time. Wealthy people provide a lot of stability by either 1) putting money in banks, which provides capital for loans and 2) investing in long-term ventures (which create "jobs").

Value isn’t a zero-sum game. Disregarding inflation, money is. Fractional-reserve banking can only increase the money supply by a finite amount. I’m also puzzled by the notion that loans create new money.

Agreed. I guess you can argue that loans put money back into circulation, but the obvious corollary is that rich people hoarding money effectively destroys it.

Loans just put debt into the economy, while the rich monopolize the credit.

There is no limit in how many loans a central bank can give to regular banks because the central bank doesn't have to be backed by deposits, gold or any other scarce resource.

We simply don't have the metrics to show it one way or the other. We have M2V for example in the US, but it isn't broken out by household income percentiles or even quintiles. We could have great velocity from lots of capital movement from equities for example, but very sluggish velocity in retail sectors that serve the low and middle socioeconomic classes.

I think the general weakness in retail (not entirely attributable to e-commerce, as e-tailing is still around 10-15% of overall retail) is likely explainable by low velocity of money in the low to middle classes. The wage stagnation over the past few decades while overall corporate revenue and profits continue to grow certainly suggest some kind of low velocity or siphoning effect. There's a certain survivorship bias in that comparison since corporations that stagnate to much eventually are put out of business, while developed nation citizens can stagnate until they pass away, so it isn't a perfect comparison to hypothesize about. But again, we simply aren't measuring for any of this nuance at this time.

If we did start measuring for it somehow, then someone would have to figure out how to measure the unit of money moving between income bands and from household to/from "big corporations" (say, any of the publicly-traded companies in the CRSP US Total Market Index and privately-held companies with the same amount of revenue as the lowest revenue element in the CRSP). Damned if I know how that would be captured, though.

Retail is a bunch of individual stories. BBBY killed it over the holidays; Macy's did not. Better to take retail company by company at this point.

Please explain your perspective.

Is it though? It seems spending on health, education, and housing are all through the roof. Everything else is better and cheaper -- why are these 3 growing at outrageous rates?

Education costs (college and up) are increasing because institutions have no incentive to manage tuition costs if the default assumption is that people will take out loans to pay them anyway.

That’s undoubtedly part of it, but I think that the real price of an education would be higher now than it was 40 or 50 years ago even in an ideal free market. Society is much more complex now than it was two generations ago, and it makes sense for the value of higher education to increase with an increase in societal complexity.

And people keep taking out loans because the (anticipated) ROI is still positive, eg, there is consumer surplus available to be captured

But the ROI keeps going down, and may be negative soon for many degrees.

I suspect it's already negative for a number of degrees but there isn't enough data to prove that yet.

Well that's the (anticipated) bit...

Because they are required, anything else is optional. Note that food and gas are also more expensive. Optional items must be cheaper and better because we can't afford them to be more expensive.

Food is pretty cheap compared to historic standards, so cheap that we have a problem with eating too much rather than too little.

Education is the one that I think can be fixed. We need to separate accreditation from the actual education. Just that would increase competitiveness and lower costs.

Healthy food isn't cheap. Unhealthy food is cheep. Particularly if you are single and trying to eat a variety of fresh things.

God, it's horrible as a single person. My roommate digs on me for what I eat (not superbly healthy, or, if healthy, in small portions) as well as for the fact I make multiple trips to the grocery (I get home at varying times, so don't always have time to cook and sometimes it's too late even to eat a crockpot meal), but also never wants to split and plan a menu for two to avoid costs.

Cooking for one is a bitch, and it sucks.

Cooking for one is a bitch, and it sucks.

Batch cooking is the solution to that, see: https://www.reddit.com/r/MealPrepSunday/

I disagree that it's the solution, unless you can find a few meals that all require the same ingredients but are cooked differently. Otherwise you end up eating the same thing multiple times a week... Which just gets old. I'm fine eating dinner one night and leftovers for a day or two, but I don't wanna do it all week, even if you slightly change it up (mix grilled chicken in a salad, then a burrito, soup, etc)

Foods like potatoes, rice, beans, apples, carrots, and chicken are all healthy and cheap. Generally canned vegetables are just as healthy as fresh.

This phenomenon is called cost disease and it's really hard to figure out why exactly it's happening.

https://slatestarcodex.com/2017/02/09/considerations-on-cost...

That summarizes really well the core economic problem faced in the US.

I think almost all of our economic anxieties revolve around the hyperinflation of education and health care costs.

Health is an extremely complicated one, but it seems like it's a classic 3rd payer problem with the added bonus that government regulation limits the profit of health insurance companies to be a fixed percentage of their revenue, so even they want prices to increase. So consumers don't care, and even when they do they can't get an all in price, and even the ones paying have an incentive to let costs rise.

One reason housing is getting more expensive is that more of the population is moving towards cities and out of rural areas. That migration has a positive correlation with housing costs. In addition the typical things used to reduce pricing, automation and offshoring, have had little impact in the construction industry due to the complexity and local nature of the work. I had seen a study previously which showed this for the US but can't find it, in it's place here is a similar study done in China (https://www.newyorkfed.org/medialibrary/media/research/staff...)

Finally, education in the broad sense is now cheaper than ever if you include public libraries and online courses, but I suspect you meant University degrees. University costs have soared, more people than ever need a degree to do even entry level work, and student loan debt is not dischargeable through bankruptcy. New York Federal Reserve did a study that showed an increase in credit was followed by an increase in university prices (https://www.newyorkfed.org/medialibrary/media/research/staff...)

Middle class income in the US is basically the same if not lower than it was 10 years ago. Household income has all but plateaued since the late 90s[1]

I can assure you that the cost of goods has gone up along with inflation.

Young people can't afford a house even with historically low interest rates.

Household debt is way up there.

[1]https://www.statista.com/statistics/500385/median-household-...

Education is pretty easy. In 2005 the government changed the law such that even private education loans could not be dismissed in bankruptcy. Prior to that the law was such that only government educational loans could not be dismissed in bankruptcy. Government loans were limited and so the effect of the law was not so huge until 2005.

But in 2005 things went crazy. Now that private student loans could no longer be dismissed it meant private lenders could throw out loans like beads at Mardi Gras. It was basically 0 risk from their perspective since you're not only getting a much higher than average earning demographic, but you get them where you have a claim on them for the rest of their life if they don't pay you off. And if they do pay you off, well you win there too!

Now because students could get practically unlimited funds universities could start to charge arbitrary amounts, and so they did. The one and only reason university costs have started to decelerate is because in 2011 we reached 'peak university'. US college enrollment started dropping even when people could "afford" it, because the perceived value became worth less than the perceived cost. Here's some data [1] from the BLS on costs. Unfortunately it starts at 2006, but it at least shows the deceleration that's started to happen once we reached 'peak university'.

The moral of this is, as usual, good intentions often go astray particularly when messing with economic systems. The reason private loans became guaranteed was ostensibly to ensure that students of all backgrounds and economic situations could afford a college education in large part to help them find a great job and give a better life to their children. It sounds great on paper. In reality, it's created a system where college costs have become completely unreasonable and simultaneously, ironically, devalued college degrees to the point that there's a pretty decent chance the guy serving your coffee not only has one, but is buried in debt over it.

[1] - https://www.bls.gov/opub/ted/2016/college-tuition-and-fees-i...

As a parent this is my sentiment. When I compare my parents middle class lifestyle to my own now, there is a lot I would not have been able to accomplish without direct financial support from them. Now I dread that I will hardly be able to do the same for my kids or even prepare for retirement.

I've always viewed the SAT prep classes as a differentiator in outcomes. The College Board always said no until recently. Even though colleges say the SAT is not important I would argue it still is. It could be the difference between attending Stanford vs not.

https://www.washingtonpost.com/news/answer-sheet/wp/2017/05/...

"Even though colleges say the SAT is not important I would argue it still is."\

If it wasn't important, they wouldn't include it in applications.

Wealth in general is evaporating from the lower/middle class rapidly.

Is it? The middle class has been growing in size over the past few decades.

I haven't seen much reporting of it growing.

http://www.pewsocialtrends.org/2015/12/09/the-american-middl...

http://www.pewresearch.org/fact-tank/2018/09/06/the-american...

Where is your evidence for that? A quick search and what I see is mostly negative news for the middle-class

https://www.weforum.org/agenda/2017/01/5-charts-which-show-w... http://www.pewsocialtrends.org/2015/12/09/the-american-middl... http://www.aei.org/publication/yes-the-us-middle-class-is-sh... https://money.cnn.com/2018/04/12/news/economy/middle-class/i...

Yea this is what scares me. I don’t know what career advice to eventually give my 6 year old. More and more careers are being automated away, and that value is being captured by fewer and fewer people. It is pretty obvious that my child’s standard of living as an adult will be much worse than mine (just as mine is worse than my parents’), and that is heartbreaking. It’s getting to the point where “hang out with rich people and try to marry up” is the most rational plan for those left in the middle class.

This is something I've feared for a decade now (completed my undergrad just as the financial crisis hit). Even before that, there were worries about customer support jobs being offshored.

Airbnb, Uber, Fiverr, TaskRabbit etc are big companies built on the premise of 'you are your own boss'. I've yet to meet an Uber driver who does it because of his entrepreneurial bent. He drives Uber because his day job isn't enough to make ends meet.

I'm not really sure of that - I've met several who have other jobs, some surprisingly impressive. My last Lyft driver was pursuing a doctorate in business management - previously he was a chip designer after getting his master's in electrical engineering. I've got a friend who drove for Uber for a few months while owning a SaaS business that did about $750K/year in annual revenue - he wanted to see what all the fuss was about, plus at the time they gave you a free iPhone with the Uber driver app preinstalled if you signed up. I've got another friend down in LA who regularly shares stories of interesting Uberpools she's been in, and there are a lot of screenwriters and aspiring actors in the bunch - which may fall into the "day job isn't enough to make ends meet" category, but they certainly have an entrepreneurial bent.

Precisely the same reason for rising anti-immigrant sentiment. I wonder if many people holding said sentiments would feel differently if the economy was growing steadily, adding jobs for both them and newcomers. But it isn't, so competition is inevitable, and thus anxiety over competition.

The economy is growing steadily...it has for 4-5 years now...

GDP is an imperfect measure. For example, the number of people below the 50% poverty line grew too.

The poverty rate has dropped for the 3rd year in a row and is almost to same levels as pre-2008 crisis.[1] In fact, near record lows over the past 50 years.

[1]https://www.census.gov/library/stories/2018/09/poverty-rate-...

I think what you are saying about the data is misleading. Look at the chart.

The reason the poverty rate had a three year drop was because it was at at 10 year high around 15% starting around 2010, and only recently started dropping significantly.

The "50 year low" is very misleading. If you actually look at the graph, the poverty in 1970 was 12.6%, and in 2017 12.3%. That's not a "50 year low", that's 50 years of essentially no progress on the poverty rate, especially when ten years ago it was higher.

If you look at the people falling below 50% of the poverty line (deep poverty), that's had it's ups and downs too, but has had an overall slow increase of rate over the same time frame.

https://poverty.ucdavis.edu/faq/what-current-poverty-rate-un...

Last time I heard of it, the gap between rich and poor wasn't just growing, but at an increasing rate. Has it been shrinking in the last 4-5 years? If not, the fact that the economy as a whole grew makes the problem worse.

The post-2008 economy replaced many middle class, and even upper middle class, jobs with ~$9/hr retail jobs and the gig economy. Both lack sufficient benefits, like health insurance, and the former ensures you never work 40 hours a week because the ACA requires businesses to offer health plans to full time workers.

If you're relatively young and in a metro area, you probably don't see it. Step out into the suburbs or more rural areas, and growth means that there's a new Dollar Tree and it's hiring.

There are more people insured post-ACA than before.

This doesn't change anything for the people who are purposely scheduled for under 30 hours weeks so they aren't considered full-time.

The problem isn't with the ACA, it's with employers who are willing to save a buck by disadvantaging their employees.

Sure, but overall the impact of ACA is positive in that more people have medical insurance.

Depending on where you live, ask someone in their 40's who came from China, India or Pakistan, someone in their 60's from Eastern Europe or someone over 80 from Ireland or Italy about "anti-immigrant sentiment". I'd be very surprised if their stories were all that different.

We keep getting fed the narrative that racism is out of control, but I believe it's not worse, it's just as bad as it's always been.

This doesn't make the situation better, but it does clamp down on the hysteria that (a) things are getting worse or (b) the rate of worsening(?) is increasing....

It is possible for things to be better then 60 years ago while becomming progressively worst over last dozen or so years.

Racism or animosity toward whatever group is not constant. And also, we should not use worst periods as benchmark for "it is ok if it is not as bad".

Anti-immigrant sentiment has little to do with jobs IMO. Jobs are simply the politically-correct face of the anti-immigrant movement. What's really at play is that immigration has been framed as a threat to [white] western culture, and that this "invasion" will bring about an end to Capitalist and Enlightenment values throughout the West.

I disagree. I think a lot of children see their parents commute 30-60 minutes both ways to a job they don't really like for 40 years, have few hobbies and life outside of work, see the massive damage corporations have inflicted on this planet, and see the massively corrupt government and think that there is no winning no matter how you slice it. I think the anxiety stems from having to be part of a system that they don't really want any part of, but ultimately don't seem to have any power to change.

Hell, I'm 26 and see/think this. It's definitely one of the major reasons I never want to have kids, too. I fear for the future of the students I'm teaching, especially coming from a rural area that's fairly anti-intellectual...

Ineffective action on climate change is a big part of it too...

Well a few decades ago it was nuclear annihilation. I was a teen then, and it was more scary than climate change if you were the sort of kid who worried about stuff.

With the Cold War, you might worry about being attacked, but could feel that your own nation was clearly taking action to protect your tribe. That's not the case with climate change.

But that's the thing about nuclear annihilation. Nothing can protect you from it. All your leaders can promise is that the entire planet will be unlivable, and not just our side of it. Cold comfort for a cold war. Different apocalypse than climate change, but just as bad.

Right or wrong, it was very visible that the US blockaded navies, invaded nations, formed alliances - fought in every way against the primary threat of the USSR. I lived through the same time, it was very obvious the government did things frequently and in many levels to fight the Cold war. Doing something, even if it doesn't reduce the core risk, reduces anxiety. (And I'm sure many people would say that many cold war actions actually did reduce the core risk too..)

I suppose we're still invading nations, but now it's for little apparent benefit, and certainly not connected to climate change.

What has the US done at the national level, especially recently, that's even easily within reach against climate change? People know - they feel it.

> What has the US done at the national level, especially recently, that's even easily within reach against climate change?

Nationally? Not sure. I don't pay much attention to national news or politics. But every day? I see wind farms and solar farms going in all over the place. I see more and more people buying EVs. I see all the major automakers devoting significant R&D to EVs (thanks Tesla, even though your cars are too expensive for me, I do appreciate the kickstart). I see local utilities decommissioning coal power plants or converting them to natural gas. I see people seriously talking about nuclear power again. People are acting, and whether it really makes a difference or not it feels like it does. That was not the case in the Cold War times, when you felt it was all out of your control as an individual, and everything that was or might have been happening was top secret and invisible.

> But that's the thing about nuclear annihilation. Nothing can protect you from it.

If it happens. The whole point of the nuclear arms race was for nuclear-capable countries to deter one another from attacking.

No such luck with climate change. We can try to slow it down, but the damage has been done.

We no longer fear nuclear annihilation because we have a functional global society. Climate change is already causing huge damage to this.

Syrian drought -> refugees -> anti-immigrant sentiment -> populist leaders -> ++boomLikelihood

The phrase "fire and fury like the world has never seen" doesn't sound familiar?

I grew up in the cold war but I was never as viscerally afraid as I was this past year.

The nukes didn't exactly go away though. We're still welcome to worry about it. :-)

For nuclear annihilation, someone actually has to press the button.

For climate change we just have to keep on doing what we already do - and in fact we are still accelerating.

Droughts and famine are no joke, it feels every more likely we might be the last generation to experience prosperity.

I think the only sensible conclusion at this point is hedonism. Enjoy it while it lasts.

I think hedonism is the root cause of this problem...

My pet prediction is that nuclear annihilation will solve climate change. Now that we've forgotten how bad nuclear war is and destabilized all the major superpowers, it's going to become very tempting for some splinter group (or orange-haired maniac) to press the Big Red Button and launch WW3. Nuclear winter has a global cooling effect that's significantly larger than the global warming effect of global warming, plus if you get rid of all the humans you get rid of human-caused climate change.

It feels like living on borrowed time, really.

Mostly, I think we worry too much.

From this (and I agree with what is quoted below, as I'm in that group of folks who studied one thing and am now performing a different job):

https://www.delltechnologies.com/content/dam/delltechnologie...

Not only will workers have many jobs, the tasks and duties of the jobs they’ll perform will be markedly different from what they studied. The experts that attended the IFTF workshop in March 2017 estimated that around 85% of the jobs that today’s learners will be doing in 2030 haven’t been invented yet. This makes the famous prediction that 65% of grade school kids from 1999 will end up in jobs that haven’t yet been created seem conservative in comparison.

Also from WEForum:

http://reports.weforum.org/future-of-jobs-2016/chapter-1-the...

I feel like the impeding doom is more due to climate change than the loss of jobs.

The rest of your hypothesis holds true for that though.

"Basic income". Society where robots do most work has no need for 100% capitalism. Society where all work is done by robots has zero need for it.

The poor dears! In our day we only had the threat of nuclear war to worry about. And Acid rain. And Chernobyl. And...

These existential concerns are still relevant, now with climate change too

Apart from being threatened by those and additional dangers, where there used to be "at least" genuine ignorance and hybris, now many people can't even overcome the peer pressure and/or their fear in order to not belittle these things (and that includes pseudo-intellectual rationalizations for not really doing anything, with lip service to "grave concerns" or whatever), and have to pretend to have dreams and successes on solid ground -- when they to are just on a raft cobbled together with duct tape, in an ocean that could be drained as a whole by random strangers before you can say "whoops". I suspect that can make people sick at a level they don't even have access to.

I can't "prove this" and I wouldn't even try, but for me personally, the fact that the sun could explode or whatever, and the asinine things people do and go along with, are in completely different ballparks. I can easily make peace with my mortality, I can not make peace with what people do. That's why I think people can become very sick because of what people do, even though everything ends eventually, anyway, regardless of what anyone does. Nuking ourselves, and the suns in the universe giving out, those might have the same end result for us, but it still feels different to think about each scenario. One is a bit sad, but still peaceful, the other is just horrible and insane and leaves a gaping wound.

The "So what? in my day, things were much harder" argument doesn't hold because your parents' generation likely suffered through the Great Depression and WW2. Chernobyl sounds like child's play by comparison.

Reply on news.ycombinator.com